Another Fine Mezz

This week on Another Fine Mezz, the spectre of challenging diaries due to time difference meant usual host and securitization editor Tom Lemmon had to miss out. However, European reporters George Smith and Victoria Thiele went on a whirlwind tour of securitization in super quick time. Although it seems some in the market may need to go back to school because there's a CMBS comprised solely of data centres, rather than the usual commercial real-estate mortgages. But as George said, the 'M' stands for data centre. There's also an update on the booming significant risk transfer market, with issuers beginning to prefer cash deals. Meanwhile in CLOs, Brigade made a roaring return to the market after three years away (who can blame them?). With arbitrage the best it's been in a while, they've even secured third-party equity.

The UK had a lot going on politically with its local and mayoral elections last week, which perhaps explains why the future of UK securitization regulation wasn't on the front page of the nationals. However, for GlobalCapital's team of securitization podcasting hacks on Another Fine Mezz, it certainly was. European securitization reporter, George Smith discussed what changes have been finalised in the new UK regulations which will come into force on November 1. There is also hope that it will lay the groundwork for more radical reforms in the future. Surely, things can only get better. There is also an unusual pipeline developing in European ABS, with two CMBS transactions in the works alongside a huge Italian RMBS. Finally, CLO reporter, Victoria Thiele has less deal activity to report on but managers are still grinding away to tighten the market. Palmer Square has led the way, dragging the market to pre-Ukraine war levels.

It was another week of 100% attendance from the Another Fine Mezz team, but such was the quality of stories this week, there was a fair bit of bickering over who got to go first. For the starter, European Securitization reporter, George Smith had Santander's mammoth German consumer ABS to discuss, where investors chose to fill up on mezz. Then, the main course was provided by CLO reporter, Victoria Thiele (and to a lesser degree, securitization editor, Tom Lemmon) as the European market salivates at the prospect of its first CLO ETF after seeing the boom in the US. Continuing with the culinary theme, dessert is learning the lengths to which George Smith will go to watch his beloved Arsenal in the North London Derby.

A full house again on Another Fine Mezz this week where CLO reporter Victoria Thiele was practically bouncing off the walls with three Euro CLOs to report on. However, host Tom Lemmon didn't quite burst her bubble as much as put into context how small it is with an update on the flood of primary market supply in US CLOs. The question across the Atlantic is whether spreads can tighten with so much in the pipeline. Finally, in less pleasing news, European securitization reporter George Smith explained the issues facing the first ever Green European CMBS, River Green after it was downgraded for the second time by Moody's.

This week on Another Fine Mezz, the full podcasting trio was on hand to digest yet another hectic week for European Securitization. First up, ABS reporter, George Smith - with his wonderful new microphone - explained why Belmont Green's buy-to-let RMBS deal took the plaudits amongst a packed field, and even got the GlobalCapital cartoon as reward for printing just 40bp wide of UK prime RMBS. In CLOs, reporter Victoria Thiele spent the week continuing to analyse how the Altice debacle would affect CLO managers, and in particular, their triple-C buckets. Securitization Editor, Tom Lemmon also chipped in with more positive news from the US CLO market, where the pipeline is so busy its preventing anyone from tightening their triple-As.

In an admirable effort to bring securitization to the people, George sat down on a Monday morning straight out of a holiday, beard still wild and unkempt, to discuss the latest movements in the ABS and CLO market with Victoria. Unusual activity in the second lien UK RMBS market kept the GlobalCapital reporters busy last week. George dug into the drivers of growth in this niche sector. For listeners who cannot get enough of second charge mortgages, Victoria spoke about Equifinance's recent debut deal on AFM's sister podcast in George's absence on Friday Primary CLO activity is taking its sweet time to restart after Easter, but great things may lie ahead: Deutsche Bank bumped its new issuance forecast for 2024 up to €37bn off the back of a record first quarter. Victoria discussed how amortisations could increasingly drive supply and demand in the months to come.

◆ Don't sweat the downgrade ◆ ABS rush ahead ◆ Another Fine Member for the team Three became four this week on everyone's favourite securitization podcast. GlobalCapital's newest reporter Diana Bravo joined the team from New York to say hello and discuss an interesting development in the US solar ABS market. Rating agencies downgraded Altice in the wake of a fateful investor call. This was bad news for European CLO managers, given that the French telecoms company is the single most widely held name in their portfolios. The situation made for some thunderous headlines, but fears of a major impact on the market are exaggerated, found Victoria Thiele. A wave of ABS issuance kept George Smith on his feet for large parts of March, and it looks like issuers are just getting started. Bankers, investors (and journalists) should prepare for a busy market until the Global ABS conferencein June.

Victoria Thiele took on hosting duties for this week's episode of Another Fine Mezz with usual host, Tom Lemmon, off playing golf somewhere. With so many ABS deals in the market, Victoria also had to ease the load on George Smith earlier in the week. But Victoria and George weren't the only ones in need of a little extra time. European ABS investors were so stretched that the question is not around whether there's enough demand to keep issuance flowing, rather if there's enough time to do the necessary due diligence. In European CLOs, Victoria went for depth as opposed to breadth this week after Arini impressively returned to the market for just the second time. And finally, while many want to believe that market participants in securitization only care about maths (and money), one "ratings guy" proved there is also room for fashion.

This week's episode of Another Fine Mezz had a certain morning after the night before feel, with Tom Lemmon and Victoria Thiele still a bit fragile from their midweek fun. Fortunately, George Smith had youth on his side to lend a steadier hand. The trio reflected on a bustling (and boozy!) night at GlobalCapital's 2024 European Securitization Awards. While the event was a great success, it was not enough to stop a pickup in activity in ABS, particularly in euros. Plus in sterling, the market looked on with intrigue as Nationwide initiated its first "drop" of Silverstone Master Issuer stock. The outlook is perhaps not as rosy in CLOs where there could be some spread plateauing after a strong few weeks. Bubbling away in the background are yet more arguments about loan docs as power shifts away from CLO managers. And finally, George gives a masterclass in the art of self defence.

This week on Another Fine Mezz, it was a case one step forward and two back as host Tom Lemmon returned only to find CLO reporter, Victoria Thiele away from her desk and enjoying the beauty of South Korea. With Tom only just back in one piece after SFVegas 2024, there was much to discuss. From spying who's visiting from their European bases, to paying homage to the superior knowledge residing in GlobalCapital's marketing team, and of course, the unofficial winners of the Swag awards. With many European teams out in Vegas, George had time to investigate mezzanine spreads a bit deeper with Pepper's recent deal showing some impressive figures. Finally, there was a look ahead to GloablCapital's European Securitization Awards on March 13, which is also in conjunction with the first GC Live on all things UK Securitization.

As much the three hosts of Another Fine Mezz love talking about deals, this episode is dedicated to the people who make them happen. At the start of a new year, some of our listeners may be thinking about the next steps in their careers, while others are looking to grow their teams. We are very pleased that Edward James, structured finance recruiter and founder of RCQ Associates, agreed to sit down with Victoria and chat about his expectations for job opportunities and compensation in 2024. But of course, George and Victoria can not resist a bit of market chat. The ABS market is finally back with some activity — including one deal that makes a reporter sing. In CLO world, spreads might not be getting tighter but they are getting more interesting. Sadly, Tom was on a plane to Las Vegas for this recording, while the (fun) chaos of SFVegas 2024 saw the podcast edited somewhat slowly too.

With SFVegas just hours away, Tom Lemmon sat down with Michael Bright, CEO of the Structured Finance Association (SFA) to hear how preparations for the huge annual gathering was going. Around 9,000 attendees expected this year, which means Bright and the team at the SFA are constantly looking improve the offering at the Aria Hotel to keep the securitization market coming back. That included dealing with some of the nuances required for the most high-profile of guests. Bright has had an extremely varied career, which includes stints at Wachovia Bank, BlackRock, Ginnie Mae and working for a US Senator. Finally, Bright spoke about his constant desire to learn led him to explore different sections of finance and policy work.

On Another Fine Mezz this week, European reporters George Smith and Victoria Thiele were given a little break while Tom Lemmon gears up for the SF Vegas 2024 conference next week. This episode is the second in the US Securitization mini-series where market participants across the sector discuss their area of expertise, but also how they got there and what it’s really like to do day in day out. For this episode, Tom sat down with Madalyn Miller, partner and co-head of transportation and space at law firm Gibson Dunn. Miller specialises in aviation ABS, which has had a rough few years, to put it lightly, following the pandemic in 2020 and war in Ukraine. She also discussed what it was like working through these unprecedented events and how she expects to see more improvement this year in the sector. Finally, Miller touches on getting a good work/life balance, even with children, and how has been in the industry as a woman. Note: This interview was recorded before Alexei Navalny’s death on February 16th was announced.

Victoria Thiele and George Smith were left to their own devices as Tom Lemmon had the audacity to take a week off, although he still managed to launch a mini series that will supplement the regular Another Fine Mezz episodes in the coming weeks. ABS issuance seemed to be taking a breather after the January rush, but that only gave George the time to dive into a particularly juicy story (and to coin the term Bridgegate-gate). Victoria had a slew of CLOs to cover, and not just any CLOs - from CVC's first ever static deal to a quirky feature of BlueBay's print, it was a bountiful week. There was also a boom in secondary equity trading, while others may suffer from a wave of loan repricings.

◆ No need to panic for consumer ABS ◆ Trusting your gut with career opportunities ◆ From the USSR to structured finance This week’s episode of Another Fine Mezz with the full team may have come and gone but this bonus episode, is the first in a mini-series where global securitization editor Tom Lemmon, talks to market participants from across US Securitization. Tom and his guests will focus not only on market trends but also each guest’s career and personal development. The guinea-pig for the first episode was Vadim Verkhoglyad, head of research at structured finance fintech Dv01. Verkhoglyad explains why the consumer ABS market has gone much better than some had feared over the past 18 months. He also spoke about how his family moved from the Soviet Union to the US when he was just eight years old and how that led to a career in finance. Finally, Verkhoglyad gives his thoughts on what to study if you want to make it in the industry.

◆ VW misses ESG deadline ◆ Good times for ABS ◆ CLO triple-A funds fear fall from power All three podcasters were reunited once again after a good week all around. While Tom tried the best burger in NYC (second best, everyone knows Corner Bistro is the best - Ed) and Victoria had reason to feel famous, George held the Big Car to account. Volkswagen broke its promise to provide loan level emissions data for its ABS transactions. Worse, the car maker did not offer GlobalCapital a good explanation for why it missed the deadline. Market conditions are looking good for European securitization, but a steady stream of deals looks more likely than a mad rush. And while CLO equity investors are willing to at least consider buying deals again, investors in triple-A rated tranches see their bargaining power waning.

This week's episode of Another Fine Mezz was a tale of determination, of squeezing every last drop you have left. Firstly, the clouds look to be finally clearing for UK buy-to-let (BTL) lenders, leading OneSavings Bank subsidiary Charter Court to drive its latest UK BTL RMBS tighter. Then in European CLOs, managers continued to take advantage of strong sentiment as they crunched spreads tighter and tighter with some now eyeing the 140bp range on the triple-As. That's better than the US market, and about 30bp tighter than the end of 2023. And finally, Securitization Editor Tom Lemmon returned to host. That was despite his voice nearly deserting him and knowing that his film debut on LinkedIn was likely to see him bullied.

Another week, another episode of Another Fine Mezz with a man down as Tom Lemmon faced yet more roadblocks on his path to being a complete US employee. Back in London, Victoria Thiele stood in as host to proudly proclaim herself as a dark horse for securitization podcast host of the year. As the newest jet-setter in the podcasting trio, George Smith reported back from a hectic week where he moderated a panel at IMN's CEE Securitization Summit in Vienna. Meanwhile, there was a glorious resumption of issuance in the euro ABS market with issuers growing their books and tightening spreads seemingly at will. Slightly less glamorous but no less important, Victoria discussed how the broadly syndicated CLO market is set to launch its counter offensive against the private credit players that have taken so much of its lunch (and airtime). Finally, there was an urgent appeal for specialist UK mortgage lender Dilosk to add an extra shelf for its RMBS programs.

◆ Europeans want UK RMBS ◆ ESMA perplexes investors ◆ CLO amortisation: a vanishing act Just two weeks into the year and Another Fine Mezz is one man down. The cold, the jet lag and a US bank holiday conspired to take Tom Lemmon out; leaving Victoria Thiele and George Smith to discuss the latest in European securitization between themselves. With deals galore in the UK RMBS market, it was a near miracle that George found the time to talk to investors about their confusion at the European Securities and Markets Authority's suggestion that they could have been anything but against simplified disclosure templates. The CLO market is off to a much slower start than ABS, although a few managers have started to market deals. Victoria thinks those that are not should not wait too long. Amortisations of vintage CLOs could wash some welcome cash into the primary market. But despite a few liquidations in the last two weeks, Victoria is not too hopeful that managers and equity owners will be sprinting to repay debt investors early.

With 2024 upon us, the Another Fine Mezz team are calling this week's episode the first of season 2. All three of Tom Lemmon, Victoria Thiele and George Smith were recording this week, while George was particularly needed after a rapid start to the new year in UK prime RMBS. Lloyds' Permanent deal also got a rather snazzy cartoon for George to brag about. However, Victoria may feel that she could have had a couple more days recovering from her NYE exploits with loan prices looking like they might delay Euro CLO issuance in January. Meanwhile, Tom's regulation addiction got a welcome hit after a consultation paper from the European Securities and Markets Authority (ESMA) was released just before Christmas. And finally, the team discussed the brilliance of George's upper lip hair.